Aprajita Anushree/AI-Generated Image
↵
Reliance Power just pulled off something it hasn’t done in a while: it posted a profit.
But before the bulls could pop the champagne, news broke that the Enforcement Directorate had raided sites linked to Anil Ambani. The stock, which had been on a bit of a run, promptly took a hit, declining nearly 5 per cent on the BSE today (July 25, 2025).
It’s a classic case of good numbers meeting bad headlines—and investors are caught in the crossfire.
What just happened?
On July 19, Reliance Power reported a net profit of Rs 44.7 crore for Q1 FY26. That’s a stark reversal from the Rs 97.9 crore loss it posted a year ago.
While revenue was actually down 5 per cent year-on-year, cost control and better margins seem to have done the trick.
Just as sentiment was improving, the ED raided premises linked to Anil Ambani in connection with a Rs 3,000 crore Yes Bank-related money laundering case. While Reliance Power hasn't been directly named, guilt by association weighed on the stock.
What does this mean for you?
If you're already holding Reliance Power, the profit turnaround and improved ratios might feel like a reason to cheer. But tread carefully. This is still a company navigating legacy issues, and the shadow of regulatory scrutiny could spook the stock.
For new investors, the low P/E and momentum may look tempting. But with quality and valuation scores still poor, this isn't your classic ‘undervalued gem’. It’s more of a high-risk, high-reward bet.
Bottom line: don’t ignore the noise around governance. Wait for more clarity before betting big.
About the company
Once the crown jewel of the Anil Ambani-led Reliance Group, Reliance Power builds, owns and operates power plants. It has a diversified portfolio—coal, gas, hydro, solar and wind.
Its big ticket? The Sasan Ultra Mega Power Project in Madhya Pradesh which generates nearly 4,000 MW.
Here’s how Reliance Power stacks up on the fundamentals:
| Metric | Value |
|---|---|
| Market cap | Rs 24,691 crore |
| P/E ratio | 8 |
| P/B ratio | 1.5 |
| ROE | 22.5 per cent |
| ROCE | 16.8 per cent |
| Book value | Rs 40.6 |
Value Research Online ratings
- Overall: 3/5
- Quality: 3/10
- Growth: 5/10
- Valuation: 3/10
- Momentum: 10/10
Should Reliance Power be a part of your portfolio?
Markets will always have their ups and downs. That’s why basing your investment decisions on short-term results or market noise can be risky. True wealth is built by staying invested for the long haul.
At Value Research Stock Advisor, our analysts cut through the noise to help you focus on what really matters: Identifying long-term compounders. So instead of reacting to a single quarter, ask the bigger question: Can Reliance Power become a wealth compounder over the next decade?
Explore Stock Advisor todayDisclaimer: This article was crafted with the aid of artificial intelligence and meticulously reviewed and edited by our human experts to ensure accuracy and provide valuable insights. It's intended for informational purposes only. We encourage you to conduct your own thorough research before making any investment decisions.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
